Span’s smart electrical panel is the missing piece to the solar-plus-storage equation
Why ArcTern Ventures led Span.IO’s $10M Series A round
ArcTern Ventures is excited to announce its investment in Span.IO. Founded by CEO Arch Rao, former head of Tesla’s energy storage business, Span has developed the first smart electrical panel for the home — used in place of a standard electrical panel, the Span panel reduces the cost and complexity of installing residential solar, storage, and EV charging equipment, and provides homeowners with advanced energy intelligence and control through a smartphone app.
Recently, ArcTern led a $10M Series A investment in Span, joining a group of top-tier investors, including Capricorn Investment Group, Incite Ventures, and existing investors Wireframe Ventures, Congruent Ventures, Ulu Ventures, Energy Foundry, Hardware Club, 1/0 Capital, and Wells Fargo Strategic Capital.
2019 was a record-setting year for both residential solar and energy storage installations in the US. Residential solar saw 15% year-over-year growth in 2019, with a total of 2.8 GW installed — the highest installation volume recorded to date. Similarly, residential energy storage installations reached a new high in Q4 2019, with ~40 MW deployed, marking the third consecutive record-breaking quarter.
Increasingly, homeowners are pairing residential solar systems with storage — in Q3 2019, SunPower reported a 20%+ solar-plus-storage “attachment rate”, and in Q4 2019, 50%+ of Sunrun’s solar sales in the Bay Area included battery storage (20% nationwide). Reductions in equipment costs and performance improvements are driving down the LCOE for solar and storage systems independently, increasing returns for customers and spurring growth. But when paired together, the economic value of solar and storage are multiplied, with homeowners benefiting from self-consumption and avoided time-of-use rates.
It’s not only pure economics driving demand — with state-wide wildfires in California in 2019 and resulting days-long pre-emptive power shutoffs impacting over 3 million people, homeowners are increasingly reducing their reliance on the grid by installing solar-plus-storage systems. Regulatory change is supportive as well — as of January 2020, all new-build homes in California must be equipped with solar panels.
But there’s a problem — the upfront installation process for solar-plus-storage systems today is costly and complex. These installs require multiple pieces of additional hardware, beyond just panels and batteries — the result is neither aesthetically pleasing nor practical: a garage full of equipment that, together, looks like a small power plant. Post-install, customers lack the ability to dynamically control which devices are powered by the battery during a blackout, and they are limited in their ability to fully understand and manage energy in the home.
San Francisco-based Span is solving this exact problem with its smart electrical panel — used in place of a standard electrical panel, the Span panel reduces the cost and complexity of installing residential solar, storage, and EV charging equipment by offsetting the need for additional hardware and reducing labor time. Post-install, the panel provides increasingly curious and connected homeowners with real-time, highly granular energy use intelligence and management, as well as dynamic back-up power control. Ultimately, the Span panel will become the central “brain” for home energy systems and connected devices, supporting both internal and third-party applications.
Like Span, we at ArcTern see electricity markets moving from centralized to distributed models — and we believe Span will accelerate this transition and provide the foundation for clean, distributed energy management for decades to come. Within the solar-plus-storage market alone, the global opportunity exceeds $3B by 2024. As electric vehicles (EVs) grow from 2% of global auto sales to 10% in 2025 and 30% in 2030, the Span panel will simplify the installation of residential EV chargers and enable these units to interact with solar and storage systems, as well as the grid. As volume ramps up and the price point drops, Span will begin replacing conventional electrical panels in homes without distributed energy resources, unlocking an even larger opportunity.
Today, the world is a drastically different place than it was at the end of 2019. The COVID-19 pandemic has resulted in an unprecedented economic downturn and transformed our day-to-day lives. The global focus is rightly on protecting lives and economies right now, but as we move towards recovery, we can apply some insights from the pandemic to climate change. We’ve seen that rapid wide-scale emission reductions are possible (~5% drop expected in 2020 due to shutdowns), and the resulting benefits of cleaner air and water. But we’re also reminded of the sudden impact that a global crisis can have on our lives, and the need to be prepared and act collectively to prevent widespread impacts.
While residential solar and storage installations may be impacted in the short-term (estimates range from ~30–50% reduction in projected 2020 install volumes, mainly due to restricted in-person sales), there are early signs of installers successfully adapting to the new environment — after switching to 100% online sales and offering solar leases at $1/month for the first 6 months, Sunrun saw a steady increase in sales through April (following a steep decline in March), and even hit a record single-day sales figure in April. Uncertainty remains, but the sector is poised to bounce back to projected long-term growth trajectories, and will ultimately play a critical role in addressing the next crisis on the horizon: climate change.
With plummeting equipment costs, improving system performance, and growing customer preference to avoid reliance on the grid, the timing is right for the Span panel, and we see immediate potential for both environmental benefit and exponential sales growth, in the US and beyond. Span has reinvented a device that has not changed in 50+ years, but is at the core of energy in the home — we are confident that this is the missing piece to the puzzle to enable wide-scale adoption of distributed energy resources, and we are excited to support Span’s next phase of growth.
